Exhibit 10.10
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT
THIS FIRST AMENDMENT TO POST-PETITION LOAN AGREEMENT (this "AMENDMENT") is
entered into as of and effective as of July 22, 2002, (the "EFFECTIVE Date"), by
and among BANK OF AMERICA, NATIONAL ASSOCIATION, as administrative agent
("ADMINISTRATIVE AGENT") for the other lenders identified on the signature pages
hereof (the "LENDERS"), and METALS USA, INC. and each of its subsidiaries (the
"SUBSIDIARIES") which are parties hereto (collectively, the "BORROWERS").
RECITALS
(a) Borrowers, Administrative Agent and the Lenders are parties to
that certain Post-Petition Loan Agreement dated as of January 2, 2002 (as
amended through the date hereof, the "AGREEMENT"; terms defined in the
Agreement and not otherwise defined herein shall be used herein as defined
in the Agreement).
(b) Borrowers, Administrative Agent, and the Lenders desire to amend
the Agreement to provide for certain modifications as set forth herein,
all subject to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:
1. AMENDMENT TO THE AGREEMENT. Effective as of the Effective Date, the
Agreement is hereby amended as follows:
1.1 AMENDMENT TO SECTION 1.1 OF THE AGREEMENT - RESTATED
DEFINITIONS. Each of the following definitions in SECTION 1.1 of the
Agreement is amended and restated in its entirety to read as set forth
below:
"FIXED CHARGE COVERAGE MEASUREMENT DATE" means the last day of
each Fiscal Period, beginning with the Fiscal Period ending January
31, 2003 and continuing on the last day of each successive Fiscal
Period thereafter.
"MAXIMUM REVOLVER AMOUNT" means $275,000,000.
"REAL ESTATE SUBLIMIT REDUCTION" means:
(a) an amount equal to the aggregate amount of all reductions
in the Real Estate Sublimit arising pursuant to section 4.3(e); and
(b) commencing January 1, 2003, an amount determined as of the
first day of each calendar month equal to
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT
Exhibit 10.10
(x) the greater of
(i) the aggregate cumulative amount, determined as
of the first day of each calendar month (commencing
January 1, 2003) equal to the product of $500,000
MULTIPLIED BY the number of full calendar months elapsed
since December 1, 2002, or
(ii) the aggregate amount of all reductions in the
Real Estate Sublimit arising pursuant to Section 4.3(e)
since the Closing Date,
PLUS
(y) all Tax Refund amounts received by any Borrower
after the date of the First Amendment to the extent applied to
the Pre-Petition M&E Loan Balance;
PROVIDED, HOWEVER, the computations in the preceding parts
(b)(x)(i) and (b)(x)(ii) of this sentence shall be interpreted so
that if at any time during the period commencing January 1, 2003 and
ending December 31, 2003, the reductions arising under part
(b)(x)(ii) of this sentence exceed the cumulative monthly reductions
in part (b)(x)(i) of this sentence, then the part (b)(x)(i)
reductions will not be required again until such time as they
exceed, on a cumulative monthly basis, the aggregate reductions
computed under part (b)(x)(ii) preceding.
1.2 AMENDMENT TO SECTION 1.1 OF THE AGREEMENT - NEW DEFINITIONS.
Each of the following new definitions is added to SECTION 1.1 of the
Agreement:
"FIRST AMENDMENT" means the First Amendment to Post-Petition
Loan Agreement dated as of July 22, 2002, among Agent and Borrowers.
"NET OPERATING CASH FLOW" means, as of the end of any Fiscal
Period and for such entire Fiscal Period, determined for the Parent
and its Subsidiaries on a consolidated basis in accordance with
GAAP, (a) EBITDA for such Fiscal Period MINUS (b) the sum of (i) the
aggregate amount of the $500,000 per-month reduction portion of the
Equipment Sublimit Reduction (and the $500,000 per-month reduction
portion of the Real Estate Sublimit Reduction, as applicable)
attributable to such Fiscal Period (if applicable, by reason the
existence of any Pre-Petition M&E Loan Balance or Post-Petition M&E
Loan Balance), PLUS (ii) the amount of Net Capital Expenditures
during such Fiscal Period.
"NET OPERATING CASH FLOW MEASUREMENT DATE" means the last day
of each Fiscal Period, beginning with the Fiscal Period ending March
31, 2002 and continuing thereafter for each of the nine successive
Fiscal Periods thereafter as set forth in SECTION 9.40 hereof.
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 2
Exhibit 10.10
"TAX REFUND" means, collectively, any and all amounts received
from time to time by the Borrowers, or any of the Borrowers, as a
refund of any tax of any kind previously paid by such refund
recipient.
1.3 AMENDMENT TO SECTION 4.3 OF THE AGREEMENT. SECTION 4.3 of the
Agreement is amended and restated in its entirety to read as follows:
Section 4.3 PAYMENTS AND PREPAYMENTS FROM COLLECTIONS AND
DISPOSITIONS.
(a) All proceeds in cash from the day-to-day, ordinary course
of business collections from Accounts and from Inventory sales will
be applied FIRST, to the Pre-Petition Accounts Loan Balance, to the
Pre-Petition Inventory Loan Balance, and to the Pre-Petition M&E
Loan Balance (in that order), until paid in full, AND THEN, to the
Post-Petition Revolver Outstandings.
(b) All Net Proceeds in cash from Accounts and Inventory
pursuant to a Disposition, including a Strategic Disposition, will
be applied FIRST, to the Pre-Petition Accounts Loan Balance and to
the Pre-Petition Inventory Loan Balance, and to the Pre-Petition M&E
Loan Balance (in that order) until paid in full, AND THEN to the
Post-Petition Revolver Outstandings.
(c) All Net Proceeds in cash from Dispositions of Equipment
(other than in connection with a Strategic Disposition, and except
as provided in SECTION 4.3(D) below) will be applied FIRST, to the
Pre-Petition M&E Loan Balance until paid in full, AND THEN to the
Post-Petition M&E Loan Balance until paid in full, in each case to
the extent of the Loan Value of Equipment of such Equipment; any
remaining Net Proceeds (if any) will be applied on a percentage
basis as follows:
(i) (x) 50% of such Net Proceeds will be applied FIRST
to the outstanding Pre-Petition M&E Loan Balance, THEN to the
outstanding Post-Petition M&E Loan Balance, AND THEN to the
outstanding balance under the Real Estate Sublimit (in that
order, to the extent such a balance exists for any of the
foregoing and to the extent Net Proceeds are available for
such application), and (y) 50% of such Net Proceeds will be
applied FIRST to the Pre-Petition Revolver Outstandings, AND
THEN to the Post-Petition Revolver Outstandings.
(d) Except in connection with a Strategic Disposition or a
Disposition of an entire business operating unit or bulk sale of
Equipment (which shall be governed by Section 4.3(f) below), all Net
Proceeds in cash from Dispositions of Equipment for which the Agent
has no appraisal will be allocated on a percentage basis identical
to the allocations set forth in Section 4.3(c)(i).
(e) All Net Proceeds in cash from Dispositions of Real Estate
(other than in connection with a Strategic Disposition) will be
applied FIRST (to the extent
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 3
Exhibit 10.10
of the Loan Value of Real Estate for such Real Estate) to the unpaid
advances under the Real Estate Sublimit until paid in full. Any
remaining Net Proceeds in cash from Dispositions of Real Estate, if
any, will be allocated on a percentage basis identical to the
allocations set forth in SECTION 4.3(C)(I).
(f) Except as to SECTION 4.3(B) above relating to Dispositions
of Accounts and Inventory, notwithstanding the foregoing allocation
requirements, the Net Proceeds of any Strategic Disposition, to the
extent they represent cash, will be allocated, as follows:
(i) first, to the unpaid advances under the Equipment
Sublimit and the Real Estate Sublimit to the extent of the
Loan Value of Real Estate or the Loan Value of Equipment for
the Real Estate or Equipment included as part of the subject
Strategic Disposition; and
(ii) any remaining Net Proceeds, if any, will be
allocated on a percentage basis identical to allocations set
forth in SECTION 4.3(C)(I).
(g) Any allocations to the principal balance of the Equipment
Sublimit advances and/or to the Real Estate Sublimit advances will
automatically result in equivalent permanent reductions in the
Equipment Sublimit and the Real Estate Sublimit, respectively (thus
resulting in permanent equivalent reductions in those components of
the Borrowing Base). It is agreed, however, that any application of
proceeds to the Pre-Petition M&E Loan Balance by reason of SECTIONS
4.3(A) and 4.3(B) above will not result in any reduction of the
Equipment Sublimit.
(h) As to any allocations provided above, all allocations to
principal, interest and fees will be made as determined by the
Agent.
(i) All Tax Refund amounts will be applied by Agent
immediately upon receipt of the same by any Borrower (and in the
case of Tax Refund amounts already on deposit with Agent as of the
date of the First Amendment, such application will be made as of the
date of the First Amendment) as follows:
(i) first, to the Pre-Petition M&E Loan Balance to
satisfy the June 30, 2002 ($11,888,000) required reduction in
the Equipment Sublimit;
(ii) next, to the Post-Petition M&E Loan Balance to the
extent necessary to reduce the same to zero dollars ($0.00);
and
(iii) next, to the Pre-Petition M&E Loan Balance in
satisfaction of the required scheduled reductions in the
Equipment Sublimit, in the inverse order of their scheduled
occurrence.
1.4 AMENDMENT TO SECTION 9.24 OF THE AGREEMENT. Section 9.24 of the
Agreement is amended and restated in its entirety to read as set forth
below:
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 4
Exhibit 10.10
Section 9.24 FIXED CHARGE COVERAGE RATIO. On each respective
fixed Charge Coverage Measurement Date as follows, the Borrowers
shall not permit the Fixed Charge Coverage Ratio to be less than the
following respective ratios:
MEASUREMENT DATE REQUIRED MINIMUM
RATIO
At January 31, 2003 and 1.0 to 1.0
at each Fixed Charge
Coverage Measurement
Date thereafter
1.5 AMENDMENT TO SECTION 9.25. SECTION 9.25 of the Agreement is
amended and restated in its entirety to read as follows:
Section 9.25 MINIMUM AVERAGE AVAILABILITY. As of the end of
each of the following Fiscal Periods, the Borrowers shall not permit
the average daily Availability (when calculating the average daily
Availability, Availability for a non-Business Day shall be
Availability as of the immediately preceding Business Day) for each
calendar month to be less than the following respective amounts:
FISCAL PERIOD REQUIRED MINIMUM
ENDING AVERAGE AVAILABILITY
June 30, 2002 and
July 31, 2002 $5 million
August 31, 2002 and $10 million
each month end
thereafter through
October 31, 2002
November 30, 2002 $15 million
and each month end
thereafter through
February 28, 2003
March 31, 2003 and $18 million
at each month end
thereafter
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 5
Exhibit 10.10
1.6 AMENDMENT TO SECTION 9 OF THE AGREEMENT - ADDITION OF NEW
Section 9.40. The following new Section 9.40 is added to the Agreement as
follows:
Section 9.40 MINIMUM NET OPERATING CASH FLOW. The Borrowers
(a) will maintain on each respective Net Operating Cash
Flow Measurement Date Net Operating Cash Flow of at least
(i.e., of no greater negative amount than) negative $2,500,000
($2,500,000). The foregoing computations for each Fiscal
Period will be made on a non-cumulative basis, so that there
will not be any carryover credit from one Fiscal Period to any
subsequent Fiscal Period(s) for Net Operating Cash Flow in
excess of the above respective minimum required amounts (i.e.,
less negative, or positive, Net Operating Cash Flow when
compared to the above respective minimum required amounts),
AND
(b) will not permit Net Operating Cash Flow for any two
consecutive Fiscal Periods, MINUS interest expense for the
same two Fiscal Periods, to exceed (i.e., be of a greater
negative amount than ) negative $6,000,000 ($6,000,000).
Additionally, the foregoing covenants as set forth in this
Section 9.40 will have no application (no further testing) after the
Fiscal Period ending December 31, 2002.
2. ACKNOWLEDGMENT OF THE BORROWERS. The Borrowers acknowledge and agree
that the Lenders executing this Amendment have done so in their sole discretion
and without any obligation to consent to any other or future amendments to the
Agreement. The Borrowers further acknowledge and agree that any action taken or
not taken by the Lenders or the Administrative Agent prior to, on or after the
date hereof shall not constitute a waiver or modification of any term, covenant
or provision of any Loan Document.
3. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof,
the Borrowers represent and warrant to the Lenders that, as of the date hereof
the representations and warranties contained in the Agreement and the other Loan
Documents are true and correct on and as of the date hereof as if made on and as
of such date, and no event has occurred and is continuing which constitutes a
Default or an Event of Default.
4. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective as of
the Effective Date upon execution by the Majority Lenders and the other parties
hereto, so long as all corporate actions of Borrowers taken in connection
herewith and the transactions contemplated hereby shall be satisfactory in form
and substance to Administrative Agent and Lenders, and each of the following
conditions precedent shall have been satisfied:
Administrative Agent and each Lender shall have received each of the
following:
FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 6
Exhibit 10.10
(a) payment to the Administrative Agent, for the ratable benefit of
the Lenders, an amendment fee in the amount of $350,000; and
(b) such other documents, certificates and instruments as the
Administrative Agent shall require prior to the date hereof.
5. REFERENCE TO AGREEMENT. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement," "hereunder," or words of like
import shall mean and be a reference to the Agreement, as affected and amended
by this Amendment.
6. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Amendment
may be validly executed and delivered by facsimile or other electronic
transmission.
7. GOVERNING LAW: BINDING EFFECT. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and shall be binding
upon the Borrower, the Administrative Agent, each Lender and their respective
successors and assigns.
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. LOAN DOCUMENT. This Amendment is a Loan Document and is subject to all
provisions of the Agreement applicable to Loan Documents, all of which are
incorporated in this Amendment by reference the same as if set forth in this
Amendment verbatim.
10. ACKNOWLEDGEMENT OF LENDERS. Each Lender acknowledges that as of the
date of this Amendment, and giving effect to this Amendment, it's respective
Commitment is as set forth opposite its respective signature to this Amendment.
11. FEES AND EXPENSES. Borrowers agree to pay all reasonable out-of-pocket
fees and expenses in connection with the Loan Documents, including this
Amendment, including without limitation, appraisal fees, filing and recording
fees, legal and other professional fees and expenses, if any, incurred on or
prior to the date of this Amendment by Administrative Agent, including, without
limitation, the fees and expenses of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. ("WSM") and
Ernst & Young Corporate Finance LLC ("EY").
12. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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FIRST AMENDMENT TO POST-PETITION
LOAN AGREEMENT Page 7
Exhibit 10.10
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as the
date first above written.
BORROWERS:
METALS USA, INC.
By: \s\ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Exhibit 10.10
AEROSPACE SPECIFICATION METALS, INC.
AEROSPACE SPECIFICATION METALS - U.K., INC.
ALLMET BUILDING PRODUCTS, L.P.
By: Allmet GP, Inc., its General
Partner
ALLMET GP, INC.
ALLMET LP, INC.
CORNERSTONE BUILDING PRODUCTS, INC.
CORNERSTONE METALS CORPORATION
CORNERSTONE PATIO CONCEPTS, L.L.C.
By: Metals USA, Inc., its sole Member
XXXXXX TITANIUM, LTD.
INTERSTATE STEEL SUPPLY CO. OF MARYLAND,
INC.
INTSEL GP, INC.
INTSEL LP, INC.
i-SOLUTIONS DIRECT, INC.
XXXXXXXX REAL ESTATE CORPORATION
XXXXXXXX STEEL GP, INC.
XXXXXXXX STEEL LP, INC.
METALMART, INC.
METALS AEROSPACE INTERNATIONAL, INC.
METALS RECEIVABLES CORPORATION
METALS USA BUILDING PRODUCTS SOUTHEAST, INC.
METALS USA CARBON FLAT ROLLED, INC.
METALS USA FINANCE CORP.
METALS USA FLAT ROLLED CENTRAL, INC.
METALS USA MANAGEMENT CO., L.P.
By: MUSA GP, Inc., its General Partner
METALS USA PLATES AND SHAPES
NORTHCENTRAL, INC.
METALS USA PLATES AND SHAPES, NORTHEAST,
L.P.
By: Xxxxxxxx Steel GP, Inc., its
General Partner
METALS USA PLATES AND SHAPES
SOUTHCENTRAL, INC.
METALS USA PLATES AND SHAPES SOUTHEAST, INC.
METALS USA PLATES AND SHAPES SOUTHWEST,
LIMITED PARTNERSHIP
By: Intsel GP, Inc., its General
Partner
METALS USA REALTY COMPANY
METALS USA SPECIALTY METALS NORTHCENTRAL,
INC.
METALS USA SPECIALTY METALS NORTHWEST, INC.
METAL VENTURES L.L.C.
By:Metals USA Specialty Metals
Northcentral, Inc., its Managing
Member
MUSA GP, INC.
MUSA LP, INC.
NATIONAL MANUFACTURING, INC.
QUEENSBORO, L.L.C.
By:Metals USA Plates and Shapes
Southeast, Inc., its sole Member
TEXAS ALUMINUM INDUSTRIES, INC.
VALLEY ALUMINUM CO.
VALLEY ALUMINUM OF NEVADA, INC.
WESTERN AWNING COMPANY, INC.
XXXXXX-XXXXXX STEEL CORPORATION
WSS TRANSPORTATION, INC.
By: \s\ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Exhibit 10.10
AGENT:
BANK OF AMERICA, NATIONAL ASSOCIATION
By: \s\ XXXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
